"The inequalities have become grotesque, and the political consequences are becoming worrying"

By Matthew Ponsford

LONDON, Oct 12 (Thomson Reuters Foundation) - As disgruntled voters fall into the arms of promise-all populists, it is time for progressive politicians to get radical and tackle the "grotesque" inequalities that are fuelling extremism, according to economist Guy Standing.

He said Western leaders must finally come clean and publicly back a basic income for all - whether recipients work or not - in a radical break from politics as usual.

"The inequalities have become grotesque, and the political consequences are becoming worrying, with the election of (U.S. President) Donald Trump, and support for far-right fascists, and for Brexit," said Standing, professor at the School of Oriental and African Studies, University of London.

Standing, who last month addressed world leaders at the United Nations in Geneva, told the Thomson Reuters Foundation that political bravery was vital in today's fraught world.

"There's a perfect storm of factors: the income distribution system has broken down and wages will not rise, and people are getting angrier and angrier," said Standing, former director of the International Labour Organization's Socio-Economic Security Programme.

"So a lot more people are saying we've got to address this economic insecurity, and the old ways of doing so haven't worked, aren't working, therefore we've got to be more open."

PUSHED INTO POPULISM

After years of stagnant wages and spiking inequality, many developed economies risk big job losses from automation or offshoring - creating a precarious outlook that pushes voters into the arms of populists, said Standing.

Standing, 69, has backed a basic wage for 30 years, and said many who had in the past privately communicated their support are now talking of it more openly - albeit painfully late.

Leaders in the Netherlands, France, Canada and the U.S. state of California are among those looking at a comprehensive, unconditional minimum income, which advocates say could streamline welfare systems and give citizens more stability.

No country has so far introduced such a radical reform of social welfare provision but debate has gained pace and won fans across the political spectrum, from radical U.S. senator Bernie Sanders to Facebook CEO Mark Zuckerberg.

Standing said failed U.S. presidential hopeful Hillary Clinton's recent support in principal for a basic income scheme was a belated mea culpa - backing an idea now that she didn't have the "backbone" to support as a candidate.

Clinton concluded in her recently released memoirs that the numbers for such a scheme did not add up.

QUITE ENOUGH QE

Standing begs to differ.

"The United States could pay for a basic income by, instead of using Quantitative Easing (QE) to give money to the financial markets, they had given it to every American a basic income. They could have paid for it easily."

Standing and Mark Blyth, an economist at Brown University, have estimated that if the $4.2 trillion in QE that U.S. Federal Reserve spent in six years after the financial crisis of 2008 had instead been paid out as a basic income, every U.S. household could have received more than $50,000.

Pilot programmes in Finland, Iran, Kenya and Canada vary widely in just what they pay, but Standing said the data gathered had countered fears of people dropping out of the workforce to live on the handouts.

A paper published in May by The Organisation for Economic Cooperation and Development said a meaningful level of basic income would however require new taxes in developed nations.

In the long term, Standing urged a radical rethink around "tax justice" and a push by politicians to convince the voters.

As to concrete ideas, he said there were plenty of natural resources that form part of the world's "common inheritance" and could be taxed accordingly.

A new land tax could see users charged rent, rather than letting owners exploit it as they see fit, re-balancing economies to offset the cost of climate change.

Those who extract resources or build private towers would pay the land tax, while those who create an open public park would be exempted, for example, he said. (Reporting by Matthew Ponsford, Editing by Lyndsay Griffiths. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, property rights, climate change and resilience. Visit http://news.trust.org)